Most global security indexes are market capitalization-weighted with a float adjustment to reflect the amount of shares available to investors.

market capitalisation of individual class of security

2. A market cap weighted broad based equity index such as the S&P500 is often used as a proxy for the market portfolio that is defined in the CAPM. Select the following statement that is least correct about cap weighted indices in this context  a. A cap weighted index is biased towards large cap firms  b. A cap weighted index is rarely the Maximum Sharpe ratio portfolio  c. A cap weighted index is biased towards low volatility firms  d. A cap weighted index is typically under-diversified to what would be expected  e. A cap weighted index is biased towards growth firms

invest in securities issued in many countries providing diversification.

The International Capital market_____a.limits the available set of lending opportunitiesb.increase overall portfolio risk for investorsc.allows investors to reduce risk by holding international securities whose price move independentlyd.is easily accessible to everyone

the capital market structure, which institution regulates and supervises the securities market in many countries, including the United States?